Texas: Where Challenge Meets Opportunity

Over the last decade the Texas economy, as well as the national economy, has certainly seen stormy years. We are now pulling out of the down cycle and Texas’ traditional strength in the oil & gas industry has been hugely influential.

As shale oil and gas are exploited, refined and converted to both energy and chemical products such as fuel oil, LNG, gasoline, ethylene, ammonia, and derivative petrochemicals we have seen a huge increase in capital projects in the form of pipelines, terminals, LNG facilities, refineries and chemical plants. This might only be the beginning. According to the U. S. Energy Information Administration Annual Energy Outlook 2012 domestic tight oil production could reach as high as 2.75 million barrels per day by 2035. The same agency reports that Texas field crude production jumped 33% over the last 12 months. By 2035 daily national production of shale gas could reach 20 trillion cubic feet per day, with Texas carrying a huge share of that.

But there is more. For years now the business sector has looked favorably upon Texas. We have seen the growth of many other industries, such as information technology, computers, electronics, health, and biomedical sciences. On a global plane climate change will spur construction to deal with rising sea levels and undependable water resources. The increased capacity of a widened Panama Canal is spurring revamps in seaports and the transportation infrastructure that feed them.

World distribution of local offices of UNITED STATES (TEXAS)-based AEC companies according to the AboutAEC database.

TEXAS-based AEC Companies

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We can talk about projects, but in the final analysis, it is all about people. The current shale gas boom and associated projects is bringing excellent opportunities for employment in both the professional and blue-collar ranks. Construction employment continues to rise in Texas. There is increasing concern over the availability of professional and manual labor to undertake the billions of dollars of planned capital projects. Fluor, one of the largest full service construction companies in the world has been reported by Hydrocarbon Processing Magazine to be in need of some 20-50,000 craft workers over the next 10 years to support oil & gas work. Some industry owners are anticipating a scarcity of workers and pushing work ahead to guarantee their projects come on line. As a result, engineering houses in the Gulf Coast are increasingly reporting rising backlogs from these conditions and competition for workers is back in a big way. All of these factors point to the increasing attractiveness of the state to those looking to get ahead. According to population estimates from the U.S. Census Bureau released in May of this year, eight of the 15 fastest-growing large U.S. cities and towns for the year ending July 1, 2012 are in Texas. The State is home to five of the 10 urban areas that added the most people over the year. Clearly, population growth is here to stay.

This population growth also creates consequential growth in other sectors that support these projects- sectors such as carbon sequestration; housing; transportation; power (fossil, solar, wind, biomass, etc.); water & wastewater; solid waste disposal; and others. To that you can add those sectors that make life worth living, such as the entertainment sector; religious and cultural facilities, health and human services, education, etc. All of these endeavors, in turn, require additional human resources for their implementation and operation.

Growth in the economy and the workforce comes accompanied by a need for public and private investment in those areas for sustained growth. With a gross state product (GSP) of $1.207 trillion, the second highest in the U.S., a wise Texas will invest in its future by developing the necessary infrastructure for healthy growth without compromising the quality of life in the state. This sustained effort in developing natural resources while wisely investing in infrastructure, water resources, and environmental protection would enable Texans to enjoy the blessings that have visited this noble state well into the future, increase the attractiveness of the Lone Star State, and further drive this perfect construction sector storm of opportunity.

Reproduced with permission of the author

Analysis

Texas: Where Challenge Meets Opportunity
Over the last decade the Texas economy, as well as the national economy, has certainly seen stormy years. We are now pulling out of the down cycle and Texas’ traditional strength in the oil & gas industry has been hugely influential.